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A powerful German business leader slammed a growing anti-Islam movement in the country on Tuesday, saying Europe’s top economy needed more immigration to remain competitive and should take in more asylum seekers.

The president of the German Federation of Industry, Ulrich Grillo, said the emergence of the group “Patriotic Europeans Against the Islamisation of the Occident” or PEGIDA, which has been holding weekly marches, was undermining the country’s interests and values.

“We have long been a land of immigration and we must remain so,” he told German news agency DPA. “As a prosperous country, and also out of Christian love for our fellow man, our country should take in more refugees.”

Grillo blasted the PEGIDA protests, which organisers have billed as a grassroots movement, calling participants “neo-Nazis and xenophobes”. He said the group was trying to harness fears of Islamist terrorism “to smear a whole religion” which he called “unacceptable”.

Grillo’s federation represents the political interests of more than 100,000 companies employing around eight million people.

He said Germany’s rapidly ageing population needed a strong influx of qualified newcomers to support the economy and the social welfare system. “Considering our demographic development, immigration ensures growth and prosperity,” he said.

He urged political leaders to do more to stand up to PEGIDA. “The political class has got to try harder to make citizens see the opportunities and diminish their fears,” he said.

This evening’s demonstration, which was the tenth such event, drew an estimated crowd of 17,500, up from 15,000 last week. PEGIDA speakers railed against the media, politicians and the supposed imminent Islamisation of Germany, and demanded action against “foreign criminals”. One speaker declared that the pattern of behaviour of Muslim women does not meet the standards expected in Europe.

A half-built mosque in the northwestern German town of Dormagen has been spray painted with swastikas and racist slogans. The act of vandalism comes as anti-Islamic demonstrations continue to grow across Germany.

The perpetrators are reported to have entered the building site late Saturday/early Sunday morning. As well as the symbol associated to Nazis, the vandals also wrote slurs such as “off with you to the concentration camp!”

The attack on the mosque has coincided with the rise of the controversial “anti-Islamization” PEGIDA movement in Germany. The group has been holding demonstrations in cities throughout the country for the past 10 weeks.

Head of Neuss district police, Hans-Jürgen Petrauschke said he was horrified by the racially motivated crime. There is “no place for the spread of xenophobia or the glorification of the Nazi past” in the Rhein-Kreis Neuss area,” he told reporters.

State security from Düsseldorf have begun an investigation into the crime and have also announced an reward of 1,500 euros ($1,833) for information leading to the arrest of the vandals.

In light of recent marches by the controversial PEGIDA movement, Germany’s Central Council of Jews (ZdJ) has come to the defense of Muslims in Germany. Chairman Josef Schuster has warned to not underestimate the group.

The newly-elected chairman of the council, Josef Schuster, said in Saturday’s edition of the German newspaper Die Welt that fear of Islamistic terrorism is being “exploited” to vilify an entire religion. “This is completely unacceptable,” said Schuster.

“Of course Islamist extremism needs to be taken as seriously as other extremist trends,” he said, “But the security authorities have long been aware.”

To draw the conclusion from so few Islamists that Islam is going to become Germany’s state religion, is “as absurd as when we conclude that, due to the existence of right-wing extremism, the Nazi dictatorship will be rebuilt tomorrow,” Schuster added.

At the same time, however, Schuster expressed his deep concerns over the demonstrations led by PEGIDA, which loosely translates as the “Patriotic Europeans Against the Islamization of the West,” and warned against underestimating the movement. They are “immensely dangerous,” he said.

“Here, neo-Nazis, parties from the far-right and citizens who think that they can finally let out their racism and xenophobia are all mixed together,” Schuster said.

The Westdeutsche Allgemeine Zeitung reports that a Muslim woman of Syrian heritage was verbally and physically assaulted by four racists in the city of Braunschweig in Lower Saxony last week.

The 29-year-old woman, who was identifiable as a Muslim because of her headscarf and dress, was struck on the knee by a car while crossing the road. Four men, who were said to be in their early 20s, got out and proceeded to subject her to anti-Islamic abuse, while one of them grabbed her by the collar of her jacket.

At that point passers-by intervened and shouted at the men, who got back in the car and drove off. Police have appealed for witnesses to contact them.

About one third of Germans are supportive of the demands of burgeoning anti-Islam rallies, according to survey findings released Friday, as Berlin puzzles over how to stem the rising tide of anger over refugee arrivals.

The latest weekly rally in the eastern city of Dresden on Monday brought out 15,000 supporters of Patriotic Europeans against Islamization of the Occident (Pegida), an anti-foreigner group.

Although Pegida is perceived as channelling attitudes of people in Germany‘s formerly communist east, a breakdown of the data by pollster YouGov showed there was not much east-west difference in responses to it.

Asked if it was “good that someone draws attention to mistakes in political asylum policies and opposes Islamists,” which is how Pegida presents its stance, 36 per cent of easterners and 33 per cent of westerners agreed.

The pollsters interviewed 1,025 Germans and adjusted the findings to be representative of the whole German population over 18.

A wave of right-wing protests in several German cities has received widespread media coverage in recent months. In October, protests organized by the “Hooligans Against Salafists” (HoGeSa) ended with sporadic violence in Cologne. Self-proclaimed “hooligans” from rival football clubs and far-right extremists joined forces to create HoGeSa to protest against Salafism in Germany.

In December, protests by the Patriotic Europeans Against the Islamization of Occident (PEGIDA) gained attention when thousands of people took to the streets of Dresden to demand stronger laws for those seeking asylum. On Monday (15.12.2015), PEGIDA had its biggest protest to date – up to 15,000 people showed up in Dresden and there were smaller protests in some 15 German cities, including Bonn and Düsseldorf.

What has been taking place at the protests on the streets of German cities is also reflected on social media. Since its first post in mid-November, around 70,000 people have liked the PEGIDA page on Facebook. That figure isn’t far behind Germany’s biggest parties, Christian Democrats (CDU) and Social Democrats (SPD), in terms of popularity on Facebook. PEGIDA and HOGESA have used their social media sites to organize the protests and call for action against Islamic extremists.

The public demonstrations by anti-Islamic groups have generated an extensive debate about an increase in anti-immigration sentiment, xenophobia and right-wing extremism in Germany.

A record 15,000 people marched Monday in eastern Germany against “asylum cheats” and the country’s “Islamisation” in the latest show of strength of a growing far-right populist movement.

Chancellor Angela Merkel earlier cautioned Germans against falling prey to xenophobic “rabble-rousing”, reacting to the nascent movement called “Patriotic Europeans Against the Islamisation of the Occident” or PEGIDA.

“The people are with us!,” the group’s founder Lutz Bachmann shouted at the crowd, celebrating a 50-percent rise in attendance since their last “Monday demonstration” in a series of rallies that started only in October.

“Everywhere now, in every news rag, on every senseless talkshow, they are debating, and the most important thing is: the politicians can no longer ignore us!” Bachmann told the mass of people, many waving the black-red-gold national flag.

“We have shown by taking another ‘little stroll’, and by growing in numbers, that we’re on the right path, and that slowly, very slowly, something is beginning to change in this country,” Bachmann bellowed to loud cheers.

Since the protests have rapidly grown in size and spawned smaller clones in half a dozen cities, a debate about immigration and refugees has gripped Germany, a country whose Nazi past makes expressions of xenophobia especially troubling.

Chancellor Angela Merkel on Friday condemned anti-Muslim demonstrations centered on the eastern city of Dresden, saying there was “no place in Germany” for hatred of Muslims or any other minority.

In a speech at a party congress of her Bavarian allies in Nuremberg, Merkel also denounced an attack on buildings in a nearby town being turned into refuge for asylum-seekers. The structures were set on fire and daubed with swastikas.

“It is unbearable when homes of asylum-seekers are defiled, when people try to make radical slogans,” Merkel said, adding that everyone coming to Germany had the right to be treated decently.

Earlier on Friday, Merkel’s spokeswoman Christiane Wirtz said: “In the name of the government and the chancellor I can say quite clearly that there is no place in Germany for religious hatred, no matter which religion people belong to.”

“There is no place for Islamophobia, anti-Semitism or any form of xenophobia or racism,” Wirtz said of the growing Monday evening marches in Dresden under the motto PEGIDA, standing for “Patriotic Europeans against the Islamization of the West”.